The largest rich countries, home to most major transnational corporations (TNCs), have agreed to a global minimum corporate income tax (GMCIT) rate. The tax counter-revolution of recent decades cut not only public spending but also tax revenue. Declining tax revenue in earlier decades and its sharp decline during the Great Recession compelled related policy rethinking. Unsurprisingly, about 75% of the additional tax revenue envisaged would go to its rich member states. As home countries have the right to tax the “residual”, or balance untaxed by host countries, developing countries will have no more reason to offer tax incentives to attract foreign direct investment.

Source: The Edge Markets June 24, 2021 05:26 UTC